Key Bank has a new method to build your credit. Click the link below;
The company that owned the golf course defaulted on a 2.4 million dollar bank loan in 2015. The bank took over the property. In March 2016 they tried to auction the property. Nobody came close to the $650,000 required starting bid. It attracted offers from apartment builders which is not what the community wanted. In the meanwhile the golf course was slowing showing signs of neglect.
In comes Danville-based Green Golf Partners. They have purchased the course as long as the community can raise $300,000 to bring back the course to playing condition. This was the only way a prospective buyer would be interested. The fund raising is close to its goal. The incentive to the homeowners in the community was losing up to $10,000 market value of their homes without a golf course.
From a Realtors perspective, Saddlebrook was always a desirable community with stable market values, well maintained properties and integrated with a golf course which attracts a lot of buyers. It is wonderful to see the community react the way they did. It shows that they have a good interest/investment in their community and are willing to go the extra mile and do what it takes to be a vibrant and energetic. Makes a Realtor very proud to sell Saddlebrook.
For more information on the history;
Friends of Saddlebrook
To a Realtor, our inventory is how many active houses are on the market currently. Today there is an extremely low inventory. To give you an example, 10 years ago at this time of year there would be 1000+ houses on the market in Pike Township. Today there are only about 140. I would call that an inventory shortage.
This would be a blessing for new home builders except they are not building low end or starter houses, at least not around Pike Township. Currently the only houses built in Pike are in the $300,000+ price point. The average price in Pike is about $150,000 according to 2016 numbers. Builders can’t seem to make any money selling low end housing. The main reason is because low end buyers don’t buy a lot of upgrades and add-ons. That is where builders make their money. In a $300,000 house the buyer may upgrade and add on about $50,000. In a $150,000 house the buyer may upgrade and add on about $10,000.
Take a drive through Zionsville where the average price of a house in 2016 was about $400,000. There are all kinds of new housing developments being built by all the major builders. Builders tend to follow the money.
This presents a new problem for the home owners that want to move up. They are afraid to list their house for fear they may not find another house to buy. One work around is to sell their present house and rent an apartment for a couple of months until they find a new home. The challenge becomes, where do you find a place to rent for a couple of months in this market of sky high rental prices. Also very few buyers want to make 2 moves. The options are limited.
Usually when homeowners want to buy a better house, they tend to buy a house that is 1.5 times the value of their current house. Taking the Pike average home sale and adding half again you get $225,000. Currently there are 8 houses for sale in the Pike in the $200,000 to $250,000 range. Through extrapolation if you had 1000+ homes on the market, there would be 50+ in that price range.
If the average homeowner in Pike does find the perfect upgrade house for them, you can pretty much guarantee that there will be multiple offers on the house and that there will be a bidding war. Bidding wars only benefit the seller and not the buyers. In 2016 there were 148 out of 1126 (13%) houses sold where the sold price was higher than the list price. One house in Crooked Creek Heights sold for $26,000 over list price.
There may be a light at the end of the tunnel for builders and entry level housing. Some builders are catering to the entry level buyer by building more spec homes. What are spec homes? When a builder builds a home or many homes on the speculation of what a buyer might want. They are not custom homes. A builder comes up with some plans on their own and builds them hoping that buyers will like them enough to buy them. This reduces builder’s costs. What costs? Normally when a buyer wants to build with a home builder, there is hours of design time with the builders sales people, inspections during the home building process and final walk throughs. With the buyer is not pre involved, the builder can work start to finish much faster.
Ten years ago during the housing markets peak and before the down turn; builders had all kinds of spec homes for sale. Problem was that when the market took a down turn, the builders were left with spec homes they could not sell or had to sell at a loss. Today builders are very weary to build a lot of spec homes.
My 17 years’ experience with Pike Township Residents Association and the presentations of many builders asking for zoning changes so they can do what they want tells me that when they do entry level housing that they pack them in as tight as they can get away with. Apparently it is the only way they can afford to do a new community. One of the biggest concerns that PTRA has is density. It is a struggle between the builder, the surrounding neighborhoods, the city, the school system and PTRA. All want different things and have different ideas.
I suspect that the shortage of inventory will go on for a couple more years. There is less and less of available land in Pike Township to build on. New communities that have affordable housing in Pike sells out quickly. Because of the shortage, baby boomers and empty nesters are buying the $300,000+ new homes much quicker than in the past in Pike.
Over the past 7 years several Real Estate Investment Trusts came into the Metropolitan Indianapolis market and bought thousands of entry level houses to fix up and rent. During the housing market crash, a lot of homeowners lost their homes to foreclosure. They had to find homes to rent since they could not finance another home right away. During this period rents sky rocketed. I suspect we are now in a time where rents cannot go much higher without making buying a home look extremely advantageous financially. If the REIT’s decide that they want out, it could flood the market with affordable housing.
Only time will tell.
Please Note – All numbers came from the Metropolitan Board of Realtors (MIBOR) Broker Listing Cooperative. Information Deemed Reliable but not Guaranteed.
I love scatter charts. I look for trends, patterns and prices. The follow scatter chart show the year to date home sales in Pike Township. The bottom is a time line and the left hand side shows the price point.
80 percent of the home sales are $186,000 or under
20 percent of the home sales are over $186,000
The highest price paid for a home was $1,250,000
The lowest price paid for a home was $6,900
The average price paid for a home was $149,966
The median price paid for a home was $122,900
The average days on the market was 79
The average square footage of a home is 1879
The average dollars per square foot is $74.99
16 percent of home sales are distressed sales
(My definition of distressed are HUD sales, bank owned sales, foreclosures, short sales and VA owned sales.)
Distressed sales are falling off in Pike Township as you can see in this chart;
Here is a chart showing just the past 3 years;
Currently with 895 home sales this year we are close to breaking the record of last years 1083 but probably not 2013’s record of 1112.
The Pike Neighborhoods page (Tab) has been updated with 2014 prices. This data base will show you all the neighborhoods in Pike Township where houses were sold, how many, high price, low price and average prices for 2014.
In the real estate business we occasionally run across a situation where a seller needs to sell their house and get the profits from it before they can buy a new house. In a perfect world a Realtor can set it up so that the seller can close on their current house and purchase their new house in back to back closings. I have done this several times and have learned form my experiences. It is best if you use one title company to do both closings. This way you are not running across town to get from closing 1 to closing 2 title companies. Also when money from the first closing has to get to the second closing title company, the money must be wired which could take hours. The logistics are critical to get the job done.
I recently had a transaction where 3 or 4 houses were involved. Each owner had to get the money from their current house in order to purchase their new house. Hence the domino theory. My listing was the first house to close and everything depended on it to start the dominoes falling.
My listing was a very nice ranch in Pike Township. The sellers had taken excellent care of it and it had great amenities. The sellers were some of the nicest clients I have ever had. The house had a good offer on it in 55 days. We negotiated a closing date a couple months out so that my sellers could find another house to buy although we had already been looking. We found a new house and made an offer. After negotiations were done which included having back to back closings at the same title company we had two dominoes in a row. The sellers of the house that my buyers were purchasing were in the same situation. They needed the profit from their house to buy the next one. They found a new house and were set to close on it the same day but not at the same title company. I am told that there was one house(domino) after that but did not verify.
Everything was set. We all were ready to close July 10th. My sellers had already moved everything out of their house and it was being held by a moving company. They were living in a essentially bare house with 2 very small children which was very challenging. Their plan on closing day was to pick up what was left and put it in their car, do the 2 closings at the title company and meet the movers at their new house to unload their furniture. It just so happened that the owners of the house they were buying had the same idea and did the same thing.
On the evening of July 9th I got a call from the buyers agent who had the buyer for my listing. She had bad news. The lender had checked the buyers credit that day and found out that the buyer had made a late payment. The closings were off. The dominoes were not going to fall in the morning. I was told that it could be a week to 10 days before the lender would allow a closing. They had to verify that the buyer did not owe any money where they made the late payment and get a credit re-score. I notified my seller. They were willing to wait. The sellers of the new home they were buying were also willing to wait.
After massive communications with my sellers, the buyers agent, the listing agent of the house my buyers were going to buy and the lender of the first buyer, we all ended up in a holding pattern. Days turned into weeks and weeks into a month. Patience was drawing thin and at any minute somebody might pull the plug and the dominoes would not fall. My sellers costs were adding up. They had to pay their lender a fee to extend the lock on their mortgage rate. They also had to pay the moving company to store their furniture. The lender was not communicating what was going on which left everyone very skeptical. There were two times during the month that the lender ok’ed the close and then canceled the day before. My seller and I communicated regularly. My main question to them was how badly did they want this new house. There answer was “very badly”. They were willing to wait.
Another challenge came into play. My sellers daughter was starting school. The new school district would not allow her to attend unless the family was living in the school district or they could tell the school when the closing date was. After 4 weeks we had no answers. It meant that the daughter might have to attend the school in their present school district for a couple of days and then transfer to the new district once they closed on the new house. Not a good situation for a child just starting school.
After the 5th week we finally got a verified closing date. It was going to be the day before school started in the new school district. At that point I questioned it. Was it really going to happen?
On August 14th the dominoes started to fall. The lender showed up at the first closing. He acted like nothing out of the ordinary had happen. He even talked about the last two days before closing that he had spent on the golf course. My seller heard that and told me after the closing that he almost threw something at the lender. The lender also gave me a folder filled with information about their company and a stress ball. It was to late for a stress ball. What I wanted was a quart of whiskey. The amount of stress this lender had put everyone through was just unreal. This lender will remain nameless but it is a lender that I have never referred business to and never will.
I am a very patient person. Probably to patient at times for my clients. I did not lose my patience on this transaction but I did write a letter to the lenders branch manager and regional manager. I don’t think it did any good but you never know.
No two transactions are the same in a Realtors life. In my 13 years as a Realtor I can’t remember a transaction that affected so many lives at one time and caused so much misery. Hopefully it will never happen again.